Senate Republicans are making a huge push to permanently lock in the Trump 2017 tax cuts. And a notable rank-and-file senator has led a series of bold moves to score points in that debate: Sen. Steve Daines (R-Mont.).
Fresh off a successful cycle leading the NRSC, Daines is once again putting himself in the center of the tax fight.
Consider this: Daines orchestrated a letter in mid-February drawing a red line on making the Trump tax cuts permanent in the GOP’s reconciliation bill. Key Republicans including Senate Majority Leader John Thune and Senate Finance Committee Chair Mike Crapo (R-Idaho) signed on. Then last week, Daines put together a White House meeting for himself and Crapo to lobby President Donald Trump on the idea.
“I’m not normally seen as one who is a hostage-taker in the United States Senate,” Daines said in an interview. “But there are times you stand on important principles, and this is one of them.”
The House budget resolution that passed last week wouldn’t leave room to extend the 2017 tax cuts permanently in reconciliation without huge budgetary offsets in the future, which Republicans don’t see as a politically viable option. So Daines and his allies would have to amend the budget resolution to get there, likely using an untested scoring option to get around the Senate’s reconciliation rules.
Because that option has never been done in reconciliation before, it’s a risk. But Daines’ view underscores why senators want to go for it nonetheless.
Making the tax cuts permanent is “a hill that I’m willing to die on,” Daines said.
Let’s talk about the why: When Republicans passed the Trump tax cuts in 2017, Daines – who spent decades in the business world before running for office – was among a couple Senate holdouts who pushed down to the wire to cut more taxes for S corporations, sole proprietorships and other pass-through businesses.
Rather than paying the corporate rate, those businesses’ owners pay income taxes directly on earnings. Many U.S. businesses, big and small, are set up this way. The 2017 law’s pass-through deduction sunsets after this year, but corporations got permanent tax cuts in 2017.
Daines emphasized the pass-through deduction must be permanent and that’s a “non-negotiable” for him, although he wants all the provisions locked in.
Here’s Daines:
“The American people face a $4.5 trillion over 10-year tax increase if Congress doesn’t act. I don’t believe we can ever put the American back in that situation again. Any kind of temporary extension would do exactly that. That’s why permanence is very important. Second, it’s important because by removing that uncertainty, it’s one of the key levers to drive economic growth,” Daines said.
This all led Daines to put together his letter demanding permanent tax cuts. At first, he figured that it was worth laying down a demand given the Finance Committee’s one-seat margin. Then Senate GOP leaders quickly jumped on board, Daines said.
And at the White House meeting Daines organized, Trump got Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick on the phone to weigh in. Daines said he made a point to ask them to voice their view on permanent extensions, noting their private sector vantage point.
Expect more from Daines to come. “I plan to be a very active voice in the discussion, a reasonable voice, but very firm – certainly on this,” he said.
